Russia - China Gas Deal Still Awaits Signatures

Russia and China will not sign a long-awaited contract at the St Petersburg International Economic Forum, the deputy chief executive of Gazprom, Alexander Medvedev said on Friday.

"We are not going to sign anything this time," Medvedev said on the sidelines of the forum.

President Dmitry Medvedev said on Thursday that two countries were finalizing talks on the price of gas under a 30-year supply contract.

In a last-minute sales effort on Thursday night, Prime Minister Vladimir Putin, often considered Russia’s top negotiator, took the Chinese leader Hu Jintao on a personal tour of Gazprom.

Asia analyst Bobo Lo said, “I was pretty surprised that they didn’t come up with some kind of face-saving gas agreement in time for Hu Jintao’s visit.”

In the deal, China would buy as much as $1 trillion worth of Siberian gas from Russia over the next 30 years, starting in 2015.

The contract, under which Gazprom was to deliver up to 68 billion cubic meters of gas, was expected to be signed at the forum, which Dmitry Medvedev and Hu Jintao opened on Friday.

Discussions between Gazprom and China National Petroleum Corporation have been protracted, with China seeking a price arrangement that sets a tariff lower to the price at which Gazprom sells gas to Europe.

The amount of gas tied to the deal would be equal to almost half the gas that Russia currently sells every year to Europe, forming an important part of Gazprom’s strategy to diversify exports away from the continent.

China can afford to wait and seek out competing gas imports from central Asia and Australia.

Who will blink first?

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